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DATE

Thursday, Aug. 6, 2026 at 9:00 a.m. ET

CALL PARTICIPANTS

• Chief Executive Officer - Ryan McMonagle
• Chief Financial Officer - Christopher Eperjesy
• Vice President of Investor Relations - Brian Perman

TAKEAWAYS

• Revenue -- $563.4 million, representing 10.2% growth driven by strong performance across core end markets and record equipment sales.
• Adjusted EBITDA -- $116.8 million, up 25.0% year over year reflecting stronger operating performance and improved rental fundamentals.
• Net Income -- $10.4 million, or $0.05 per diluted share, primarily due to higher operating income and a favorable income tax swing during the period.
• SER Revenue -- $218.8 million, with adjusted EBITDA of $117.2 million, driven by double-digit growth in both rental revenue and rental equipment sales activity.
• STEM Revenue -- $344.6 million, with adjusted EBITDA of $37.2 million, reflecting a quarterly record for external customer sales and equipment deliveries.
• Fleet Utilization -- 81.6%, up 400 basis points from last year due to record demand levels in transmission and distribution utility markets.
• On-rent Yield -- 39.4%, representing an 80-basis-point increase year over year as the company benefited from a higher mix of transmission equipment and pricing discipline.
• Ending OEC -- $1.68 billion at quarter end, the highest level in company history, supporting management's outlook for continued rental growth.
• New Sales Backlog -- $322.5 million, down $89 million from the end of the first quarter following record deliveries during the second quarter.
• Net Leverage -- 3.85x, improved from 4.02x in the prior quarter and driven by increased adjusted EBITDA and levered free cash flow generation.
• FY 2026 Guidance -- Consolidated revenue of $2.1 billion to $2.2 billion and adjusted EBITDA of $437.5 million to $455 million, representing year-over-year growth of 14% to 19%.
• Net Rental Fleet Investment -- Revised to $170 million to $200 million for the full year to support strong demand in the transmission and distribution markets.
• Levered Free Cash Flow -- Expected to exceed $50 million for fiscal 2026 as inventory and floor plan balances are reduced in the second half of the year.
• Inventory -- $1.04 billion at quarter end, reflecting a planned increase to position chassis ahead of scheduled deliveries and upcoming emission standard changes.
• June Quoting Activity -- Rose 26% year over year, providing management with confidence regarding order intake during the second half of the year.
• Fleet Age -- Averaged just over three years at quarter end, which management noted allows for moderated capital investment while still pursuing growth.
• ABL Availability -- $229.4 million at quarter end, which provides liquidity to support operations and strategic investments.
• STEM Order Backlog Duration -- Stood at approximately 3.5 months, slightly below the company's targeted range of four to six months.
• Non-rental CapEx -- Projected at $40 million to $50 million for the full year, focused on infrastructure and facility maintenance.
• RPO Buyouts -- Benefited rental equipment sales in the Specialty Equipment Rentals segment, contributing to record quarterly revenue.

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RISKS

• McMonagle indicated that upcoming EPA standards will result in cost increases for customers, stating, "it's going to be a cost increase for our customers, and we're obviously doing everything we can to mitigate that heading into '27."

SUMMARY

Management reported that growth in the second quarter was primarily driven by strong demand in the transmission and distribution utility markets, which supported record revenue and equipment deliveries. The company stated it is navigating a transition in emission regulations by executing chassis prebuy actions and managing inventory to align with expected second-half deliveries. Executives noted that high bidding and quoting activity suggests a sustained demand cycle for specialized infrastructure equipment. The company continues to prioritize net leverage reduction and free cash flow generation as it progresses toward its long-term financial targets.

• CEO McMonagle characterized the current market environment as "the early stages of what could be a once-in-a-generation transmission demand super cycle."
• Regarding the EPA 2027 NOx regulations, McMonagle stated, "Given our current inventory position, the chassis prebuy actions we have already taken and our strong relationships with our chassis OEM partners, we believe CTOS is well positioned to navigate the impact of the upcoming emission standards changes."
• CFO Eperjesy noted that STEM gross margins were impacted by "increased sales to national accounts, which tend to carry modestly lower margins."
• Management indicated that bidding activity and customer conversations lead the company "to believe that these conditions will persist through the remainder of 2026 and beyond."
• CFO Eperjesy stated that "free cash flow generation and deleveraging remain key focus areas" as the company works toward a net leverage ratio below three times in 2027.
• The company reported that its rental business enters the third quarter with utilization above prior-year levels, though year-over-year growth rates may moderate as management laps record performance from the second half of 2025.

INDUSTRY GLOSSARY

• ABL: Asset-Based Lending, a type of credit facility secured by specific company assets such as accounts receivable and inventory.
• IOU: Investor-Owned Utility, a private company that provides utility services such as electricity or natural gas.
• NOx: Nitrogen Oxides, a group of gases produced during combustion that are subject to increasingly stringent environmental regulations.
• OEC: Original Equipment Cost, representing the initial cost of rental equipment before depreciation.
• RPO: Rental Purchase Option, a contract that allows a customer to rent equipment and later purchase it with a portion of the rental payments applied to the price.
• SER: Specialty Equipment Rentals, the company segment focused on renting specialized machinery and providing related maintenance services.
• STEM: Specialty Truck Equipment and Manufacturing, the company segment focused on the sale and customization of new and used equipment.
• T&D: Transmission and Distribution, the infrastructure systems used to transport high-voltage electricity and deliver it to end-use customers.

Full Conference Call Transcript

Operator: Ladies and gentlemen, thank you for standing by, and welcome to Custom Truck One Source's Second Quarter 2026 Earnings Conference Call. Please note, this conference call is being recorded. I would now like to hand the conference call over to your host today, Brian Perman, Vice President of Investor Relations for Custom Truck One Source.

Brian Perman: Thank you, operator, and good morning. Before we begin, we would like to remind you that management's commentary and responses to questions on today's call may include forward-looking statements, which, by their nature, are uncertain and outside of the company's control. Although these forward-looking statements are based on management's current expectations and beliefs, actual results may differ materially. For a discussion of some of the factors that could cause actual results to differ, please refer to the Risk Factors section of the company's filings with the SEC. Additionally, please note that you can find reconciliations of the historical non-GAAP financial measures discussed during the call in the press release we issued yesterday after the market closed.

That press release and our second quarter investor presentation are posted on the Investor Relations section of our website. Yesterday afternoon, we also filed our second quarter 2026 10-Q with the SEC. Today's discussion of our results of operations for Custom Truck One Source Inc., or Custom Truck, is presented on a historical basis as of or for the 3 months ended June 30, 2026, and prior periods. Also a reminder that beginning last quarter, our financial reporting now reflects our 2 new reportable segments: Specialty Equipment Rentals, or SER, and Specialty Truck Equipment and Manufacturing, or STEM.

While our 2026 results in our earnings press release and SEC filing reflect the application of intersegment pricing and margins as per accounting requirements for intersegment sales, the segment results for 2025 reflect the intersegment sales with no margin as no intersegment agreement was in place in the period. For an illustrative comparison of what the 2025 results would have been had intersegment sales been reflected with the appropriate gross margin and had other internal accounting policies been in place at the time, please see the appendix of the Q2 investor presentation posted on our Investor Relations website. Joining me today are Ryan McMonagle, CEO; and Chris Eperjesy, CFO. I will now turn the call over to Ryan.

Ryan McMonagle: Thanks, Brian, and good morning, everyone. We delivered record revenue in the second quarter, capping a strong first half, driven by continued strong momentum in our core end markets and outstanding execution by our team. In the second quarter, we generated revenue of $563 million and adjusted EBITDA of $117 million, up 10% and 25% year-over-year, respectively. Our Specialty Equipment Rental segment continues to deliver consistently strong performance, driven by sustained and growing demand in the transmission and distribution or T&D markets. Our rental fleet averaged 81.6% utilization during the quarter, up 400 basis points from Q2 of last year. This was supported by continued robust levels of OEC on rent, which averaged $1.37 billion in Q2, up 13% year-over-year.

So far in Q3, both measures have continued to show year-over-year growth. We believe that we are in the early stages of what could be a once-in-a-generation transmission demand super cycle. We ended the quarter with total OEC of $1.68 billion, the highest quarter end level in our history, which will support our expected continued growth in SER revenues in the second half of this year. Also, our average fleet age is just over 3 years old, which we believe is one of the youngest fleets in the industry, and positions us well to support our customers' needs across the country.

Our trucks and equipment continue to power the people who strengthen and build critical infrastructure in the U.S. and Canada. The market has been focused on the durability of demand in T&D and our ability to convert improving rental KPIs into earnings and cash flow, and we believe our trending results over recent quarters speak directly to that. Bidding activity and ongoing conversations with our customers lead us to believe that these conditions will persist through the remainder of 2026 and beyond. Our Specialty Truck Equipment and Manufacturing segment had record performance in the second quarter, with equipment sales reaching an all-time quarterly high for the company and reflecting continued healthy end market demand and order flow.

For Q2, STEM revenue, excluding sales to our SER segment, was up 5% versus Q2 of 2025, which at the time was a record for non-fourth quarter equipment sales. New sales order backlog ended the second quarter at $322 million, down $89 million from the end of Q1 on record Q2 deliveries. Despite the decrease in our backlog in Q2, intra-quarter order flow remains strong, and our backlog has grown so far in Q3. We continue to see strong sales demand in the utility end market, especially focused on transmission equipment.

In the infrastructure end market, we have seen less growth, but our ongoing conversations with our customers and the pace of bidding and our order activity combined to provide us with the confidence to expect another year of growth in third-party customer revenue for STEM. With respect to the EPA '27 NOx emission regulations, the EPA introduced its proposed changes to the rules in early July, which maintained the 2027 NOx standards while adding non-conformance penalty provisions. The regulations are expected to be finalized later this year.

Given our current inventory position, the chassis prebuy actions we have already taken and our strong relationships with our chassis OEM partners, we believe CTOS is well positioned to navigate the impact of the upcoming emission standards changes. Given our strong year-to-date performance, robust conditions in the T&D end markets and our outlook for the rest of the year, we are increasing our previous full year 2026 consolidated revenue and adjusted EBITDA outlooks. We expect consolidated revenue in the range of $2.1 billion to $2.2 billion and adjusted EBITDA in the range of $437.5 million to $455 million.

Long-term sustained end market demand buoyed by secular megatrends, combined with our ability to provide exceptional execution on behalf of our customers, sets us apart from our competition. Our long-standing relationships with our strategic suppliers and customers continue to be keys to our success. I continue to have the highest degree of confidence in the Custom Truck team and want to thank everyone for their hard work and dedication that helped achieve our extraordinary results in the second quarter. We look forward to updating everyone soon. With that, I'll turn it over to Chris, to walk through the numbers in more detail.

Christopher Eperjesy: Thanks, Ryan, and good morning, everyone. I'll start with the consolidated results for the quarter, then discuss segment performance, our balance sheet, liquidity and leverage and finally, our updated 2026 outlook. Our second quarter 2026 results reflect stronger operating performance across the business and improved rental fundamentals, particularly in our T&D end markets. For the second quarter, total revenue was $563 million and adjusted EBITDA was $117 million, representing 10% and 25% growth, respectively, versus Q2 2025. On a GAAP basis, second quarter net income was $10 million or $0.05 per diluted share compared with a net loss of $28 million a year ago, bringing first half net income to $6 million.

About $19 million of that year-over-year improvement reflects a favorable income tax swing as the prior year quarter carried a tax expense related to an adjustment in our estimated effective tax rate. The balance was driven by higher operating income. Turning to our segments. In SER, second quarter third-party revenue, excluding intersegment sales, was $219 million, up 20% year-over-year, driven by strong double-digit growth in both rental revenue and rental equipment sales activity. Rental sales activity benefited from an increase in RPO activity in Q2 versus the same period last year. Segment adjusted EBITDA of $117 million was up 26% year-over-year, with segment adjusted EBITDA margin of 53%, up more than 700 basis points versus Q2 2025.

Our key rental KPIs in SER remained quite strong in Q2, continuing the momentum we've experienced in recent quarters. In Q2, utilization averaged 81.6%, up 400 basis points versus Q2 2025. Average OEC on rent in the quarter was $1.37 billion, up almost $160 million or 13% versus the same period in 2025. On-rent yield in the second quarter was 39.4%, reflecting both sequential and year-over-year increases for the quarter. On-rent yield remained within our targeted upper 30s to low 40s percent range, and we continue to see opportunities for rate improvement as transmission mix grows and pricing discipline holds. Our historically strong rental KPIs reflect both increased rental activity and the continued scaling of our fleet to meet demand.

Net rental CapEx in Q2 was $36 million, and our fleet age at quarter end was just over 3 years, a modest increase from the end of last quarter, which is consistent with our plan to reduce maintenance CapEx and age the fleet somewhat this year. Our OEC in the rental fleet ended the quarter at almost $1.68 billion, up approximately $120 million versus the end of Q2 2025 and by almost $24 million sequentially. The increase reflects disciplined fleet investment in the face of strong demand, particularly in T&D.

While we expect to continue to invest in the fleet in 2026, our planned decrease in maintenance CapEx in 2026 compared to 2025, should contribute to increased free cash flow generation this year versus last year. In STEM, second quarter third-party revenue was $345 million, a quarterly record and up 5% versus Q2 of 2025, which previously represented our highest non-fourth quarter revenue in our history. STEM segment adjusted EBITDA was $37 million and segment adjusted EBITDA margin was 8.5% in the quarter. Recall that our 2025 segment adjusted EBITDA does not include any margin on intersegment sales, while 2026 segment adjusted EBITDA does.

STEM gross margins in the quarter were slightly lower as a result of increased sales to national accounts, which tend to carry modestly lower margins. Our new sales backlog ended Q2 at $322 million, down $89 million sequentially on record Q2 deliveries at approximately 3.5 months, just below our targeted range of 4 to 6 months of new sales. June quoting activity increased 26% year-over-year, supporting expected growth in our order intake in the second half. We've seen strong order growth so far in Q3, and our backlog currently stands at more than $340 million. Turning to the balance sheet and liquidity.

With LTM adjusted EBITDA of more than $431 million and net debt of $1.66 billion, we finished Q2 with net leverage of 3.85x. This represents a sequential quarterly improvement of 0.17 turns and more than a 0.8 turn improvement versus the end of Q2 2025. Availability under our ABL was $229 million as of June 30. And based on our borrowing base, we have more than $240 million of additional availability that we can potentially access via our existing facility. Free cash flow generation and deleveraging remain key focus areas for us.

The increase in our inventory during the first half was largely planned, reflecting chassis and whole goods positioning ahead of scheduled second half deliveries together with the chassis prebuy actions Ryan discussed. Even with that increase, we expect to reduce inventory and floor plan balances during the second half of 2026, which should support improved free cash flow generation. Through the first half of the year, levered free cash flow improved by approximately $40 million versus the prior year period. With respect to our 2026 guidance, the demand environment across our key end markets remains very strong.

We expect the STEM segment to continue to benefit from an overall favorable macro demand environment as well as our strong relationship with our key customers and chassis and attachment suppliers. Our order backlog supports this. In our SER segment, what we see on rent and utilization reached historically high levels in the second half of fiscal 2025, and consistent with our year-to-date results, we expect those levels to continue building sequentially in the second half of 2026. Demand for our equipment that serves the T&D utility markets continues at record levels, and we expect the vocational rental market to provide incremental growth as we further penetrate this expanding end market.

Given our young fleet age, we continue to expect to be able to significantly reduce our overall investment in our rental fleet in 2026 versus 2025, while continuing to generate growth. The small increase in our fleet age to just over 3 years in the second quarter reflects this. However, given demand trends in our T&D end markets, we plan to modestly increase our net investment in our rental fleet from our previous estimate and now expect a range of $170 million to $200 million, which supports mid-single-digit net OEC growth this year. This represents a meaningful reduction from over $250 million in net fleet CapEx in 2025.

After prior year's investments in inventory, driven by the strong demand environment, we expect to continue making progress on further net working capital improvements in 2026, as we continue on our path of reducing inventory levels on hand to our target level of below 6 months. As a result, we continue to expect to generate more than $50 million of levered free cash flow and reduce our net leverage ratio to meaningfully below 4x by year-end 2026, while progressing towards our 3x net leverage target in 2027. Our increased 2026 revenue guidance reflects consolidated revenue in the range of $2.1 billion to $2.2 billion or year-over-year growth of 8% to 13%.

Given the strong environment in the T&D end markets and overall strength across both of our segments, we are also raising both the bottom and top ends of our adjusted EBITDA guidance and now project a range of $437.5 million to $455 million, resulting in year-over-year growth of 14% to 19%. We still expect non-rental CapEx of $40 million to $50 million. We are increasing our segment guidance for 2026 as well. We are projecting SER revenue of $850 million to $875 million and STEM revenue of $1.63 billion to $1.7 billion, with STEM third-party new sales revenue growth of 3% to 10%.

Overall STEM sales are expected to be down marginally to up 3%, with the variance attributable solely to a year-over-year reduction in intersegment sales due to lower SER maintenance rental CapEx spending this year. For the third quarter, we expect consolidated revenue and adjusted EBITDA to be up year-over-year, though modestly below second quarter levels. A portion of our second quarter new and used equipment deliveries, including RPO buyouts, have been planned for the second half. That timing shifted results between quarters but did not reduce the full year expectations reflected in the ranges we raised today. Our rental business enters the third quarter with OEC on rent and utilization above prior year levels.

We expect both to grow sequentially with year-over-year growth rates naturally moderating from here as we lap a second half of 2025, that posted the largest increase in OEC on rent in our history. The fourth quarter remains our historically strongest quarter. In closing, I want to echo Ryan's comments regarding our continued strong business outlook. Despite broader macroeconomic uncertainty, recent results and end market fundamentals support our confidence in the long-term demand drivers and our ability to deliver meaningful adjusted EBITDA growth this year. With that, operator, we can open the line for questions.

Swetha Rakhecha: Ryan and Chris, Swetha here on behalf of Manish. Congrats on the great quarter. My first question is on the quarterly cadence given that you've indicated that third-party new equipment sales and used equipment sales and RPO buyouts have shifted from the second half into 2Q. Can you help us quantify the revenue and the adjusted EBITDA that is being pulled forward and clarify how much of it came from 3Q versus 4Q?

Operator: Brian, just making sure you're unmuted on your end. We are currently experiencing some technical difficulties. One moment while we deal with these difficulties. Everybody, thank you so much for standing by while we dealt with those technical difficulties. We are back in the Q&A portion. Just a reminder that the question is from Swetha Rakhecha from Cantor Fitzgerald. Swetha, if you could just ask your question one more time, so we could get the Q&A portion rolling.

Christopher Eperjesy: She's not able to, I can repeat the question. Basically, she was asking -- this is Chris. She was asking about the cadence, Q2, Q3, first half, second half. And so I think the way I'd answer that, Swetha, is typically -- especially in Q2 and Q3, we have seen historically some push forwards and pushouts. So to quantify the net is a little more challenging. But maybe just to give you a little bit of color, what we're expecting in Q3 -- if you look back last year, we saw Q3 growth of roughly 20% EBITDA year-over-year.

What we're expecting this year is we're expecting both revenue and EBITDA to grow kind of high single-digit percentage range, while coming in below the second quarter levels that we had mentioned, really, which just reflects the delivery and RPO buyouts that shifted into Q2 from the second half. And then historically, we've given guidance of the split first half, second half, which has been anywhere 45% to 47% first half and then 55% to kind of 57% in the second half of the year.

This year, we think because of that pull forward and just the timing of last year's ramp-up on OEC on rent in the second half of the year that it's likely to be more of a 48%, 52% kind of split, first half, 48%, second half, 52%. And then looking at Q4, that typically is our seasonally strongest quarter, and we'd expect that to continue to be the same this year.

Michael Shlisky: Can you hear me okay?

Ryan McMonagle: Yes, we can hear you. Good to talk to you.

Michael Shlisky: Because I couldn't hear you for a few moments there. Okay. You had mentioned intra-quarter order flow was strong. Perhaps I missed this, but could you maybe just share with us how much were orders up year-over-year in the STEM segment, whether they were put in the backlog or they made through within the quarter?

Ryan McMonagle: Yes. It's a good question, Mike. We saw converted orders up kind of in that low single digits range and then orders or quotes were up in the double-digit range. And so it's kind of a good leading indicator for the back half of the year.

Michael Shlisky: Got you. And I also wanted to ask about the emissions standard changes. I mean, basically, your customers aren't really hauling freight. They're not looking to be out on the road 12 hours a day driving around. Do you consider the recent changes really just an inflation item that you need to pass along? And if so, I mean, have the customers had a really negative reaction to the fact that because of things that are out of your control, you're going to have to raise prices a bit?

Ryan McMonagle: Yes, it's an interesting one to work through, and it still feels like some of the regulation is still being finalized. But I think the non-conformance penalties have been announced, and we're estimating those are in kind of the $4,500 to $7,000 range depending on spec and obviously, a few of the factors in there. And that's to continue running on the same engines, right, that we're running on today. And so we've taken the position, Mike, as you know, that let's buy forward a little bit, just the economics of the non-conformance penalty to us makes sense to carry more inventory heading into 2027.

And then obviously, for us, the engine that is most impacted is the L9 engine, which is shifting to the X10 engine from Cummins. And so we're watching that closely and Cummins is now saying they'll be in full production on the X10 later in Q3 of next year. So we're watching how that plays through. But yes, it's going to be a cost increase for our customers, and we're obviously doing everything we can to mitigate that heading into '27.

Michael Shlisky: And maybe lastly, just the map in the slide deck, how close are you to opening up some of those lesser served markets right now, like the New York, New Jersey Metro area, the Carolinas, et cetera, the other items that you mentioned on the slide deck. I did see an opening in the Northwest. What might be next on the calendar for you for your footprint here?

Ryan McMonagle: Yes, we're working on all those markets. So that's -- those are areas where there's clearly opportunity to grow. And so I don't -- we're not expecting any other openings this year. And so those would be kind of in the years ahead. And that would be fairly consistent with how we guided a couple of locations -- opening a couple of locations this year.

Naim Kaplan: This is Naim on for Nicole DeBlase. So my first question, you've consistently highlighted that your long-term demand is underpinned by major federal funding packages, including the IIJA, the IRA and the CHIPS Act. So given that we're getting later into 2026, can you describe how these federal dollars are translating into actual order flow? What percentage of the $322 million STEM backlog or SER booking pipeline directly tied to projects receiving federal subsidies or grants? And in which fiscal year do you project the legislative tailwinds could reach their peak contribution to top line growth?

Ryan McMonagle: Yes. Good question, and I'll try to answer it with maybe kind of broad comments about our end market demand. So we're seeing -- right now, we're seeing really strong demand in transmission and distribution. I would argue that is less kind of backstopped by some of the federal funding programs. Obviously, there are some grants and approvals that are going on out there. So I'd say those are less directly impacted by federal spending dollars. They are impacted by some of the regulatory improvements, right, that we're seeing on that side of the business. And so I think that's where we're seeing really strong demand right now.

In some of our prepared comments, we mentioned the infrastructure side of things, which would be more directly impacted by some of those federal spending dollars. We have yet to see that pick up in a meaningful way. And so I would expect that as those dollars are released, it's kind of a future benefit later this year or really into next year that we would begin to see some of those dollars really impact backlog and ultimately our revenue.

Naim Kaplan: Got it. That is helpful. And then one question on SER, if I may. So SER average fleet utilization reached 81.6%. So this utilization is at the very high end of your historical target ranges with a young average fleet of about 3 years, is 81% to 82% sustainable run rate in the supply environment? Or should we model a normalization back down to like the high 70s as you raise net rental CapEx -- as you raise net rental CapEx brings new fleet online in the second half?

Ryan McMonagle: Yes, I think that low 80s is a good spot to live, right? And I think a couple of things are benefiting that, right? You mentioned the fleet days, which I think is a positive. And then certainly, as you're heading into a transmission cycle, those projects are generally longer duration projects, which should benefit utilization kind of where it is or even climbing into the fall, which is generally what happens in our business.

Justin Hauke: Yes. I guess, Chris, you kind of answered this question with the seasonality, but I was just wondering if you could quantify the pull forward of orders that you saw in 2Q that were expected in 3Q? And then I guess maybe a broader question is just -- is some of that people converting from what would otherwise have been a rental and they want to own equipment ahead of kind of long-term visibility? Or what's driving that?

Ryan McMonagle: Yes. I'll let Chris start maybe on the seasonality, Justin, and then I can give you some commentary on what's driving it.

Christopher Eperjesy: Yes, Justin, it's hard to quantify because there would have been pull forward and push out last year as well. And so I don't want to give a gross number when it really should be a net number. But it was tens of millions, I guess, between both new sales and used sales. But again, last year, there would have been a similar pull forward related to some of the prebuy pre-tariff to get ahead of the tariff prebuy last year. I'll let Ryan answer the second part.

Ryan McMonagle: Yes. And then, Justin, we've talked about this in the past and certainly when -- several years ago when the business was performing well. But we see kind of that -- some of that prebuy is just a good indicator of long-term demand. So some of that showed up and Chris mentioned some of those sides, but some of that showed up in our rental asset sales line. And that was customers who wanted to go ahead and have their equipment for the long term. And so that's -- you take that as a good indicator of future as well.

Justin Hauke: Great. And I guess my second question, I apologize if you gave this number, I didn't hear it. But obviously, the levered free cash flow guidance isn't changed, but you did talk about holding the inventories up or I guess, investing a little bit more there. They were up sequentially. Are you still expecting kind of $100 million of inventory benefit for the year? And I think on a working capital basis, I think it was supposed to be closer to $30 million to $40 million. I'm just trying to see if there was any change in kind of the inventory expectations.

Christopher Eperjesy: Sitting here today, that is still our target. I think more importantly, we still feel comfortable we'll be above the $50 million of levered free cash flow. How that comes EBITDA growth versus net working capital versus other potential cash flow triggers, they're kind of moving parts, but I think we still feel like there's a path to get the numbers that you just quoted.

Scott Schneeberger: Congratulations on the strong quarter. Ryan, I very much appreciate the transition demand super cycle phrase coined. I'd like to dig in a little bit there. Could you talk, maybe take us a little bit deeper about what is driving in transmission, what you're seeing there? How sustainable is it? Why coining it a super cycle? And then maybe some digging into some other verticals that are very strong. Are you seeing a lot of data center and obviously, transmission-related enabling of power tied to it? Just a bit digging in more to the end markets.

Ryan McMonagle: Yes. No, good to talk to you, Scott, and yes, happy to do that. There's a couple of things I think that we're really lasered in on. One is obviously a lot of our customer -- what our customers are saying, so both our public company customers and kind of what they've reported even in this quarter and how they're talking about it. But maybe more importantly for us is what our kind of day-to-day conversations are with those customers. And so there's a lot of planning going on for new lines that are beginning, that are being prepared, that are being designed, and the equipment is beginning to be staged.

And so for us, that's really kind of that indicator of, hey, this is a long-term cycle. So it's projects that don't begin until 2027 and going into 2028 as well. And so I think that's where the tone of the conversation has changed meaningfully. So we -- obviously, that's what we're listening to most closely. A lot of kind of the industry aggregators of what's going on with line miles and completes and expected starts, obviously, is strong, it's encouraging there as well.

So I'd say that's kind of the fundamental thing, Scott, that really gives us comfort that this is the beginning or early innings, beginnings of a very long cycle here, which generally is how transmission plays if you look back historically as well. So I'd say that's certainly where the strongest is. And then to ask about some of the other end markets, distribution is still good. It does feel like maybe there are some IOU dollars shifting from distribution to transmission to meet the demand that we're seeing in the short term. And then you're right, Scott, things like data centers are -- they are a good tailwind.

They're a good tailwind for us, but not fundamentally what's driving kind of the growth that we're seeing in the T&D end market.

Scott Schneeberger: I appreciate that, Ryan. And then can we talk a little bit about pricing? Obviously, a lot of dynamics impacting how pricing is right now, how it is going to be going forward. OEC yield on rent has been accelerating in each of the quarters in the first half, coming into some tougher comps and obviously, engine changes into next year. Can you just speak about appetite of the customers on taking pricing? It seems like it's pretty good right now, and there's understanding of cost pressure. But just where you think that can go over, let's say, the next 2 to 6 quarters, please?

Ryan McMonagle: Yes, I'll start, and Chris can kind of give some historical perspective, too. But look, Scott, 2 things are going on right now. There's obviously, when there's strong demand, we obviously want to be competitive in price and take price kind of where we can. The other dynamic that we've talked about, too, is as transmission picks up, right, it's generally at a higher on-rent yield than distribution. And so you'seeing a little bit of that impact in our business today as we talk about this transmission super cycle period, right, that we're going into. So I think we talked about on the Q1 call, we took price up about 5%.

And obviously, the way that gets applied is it's not just a peanut butter spread, but we took price up about 5% at the very end of last year, beginning of this year. Chris, do you want to add anything else?

Christopher Eperjesy: No, probably the only other thing I would add is we've talked about kind of wanting to live in that 15% to 18% range on new sales. We're at the lower end of that range right now. And largely, that was driven in this quarter, really high volume with some mix to larger customers and then some product mix, but we still feel comfortable that we can within that range and get certainly towards the higher end of that range as demand continues to be strong in the next year.

Scott Schneeberger: And just following on that, how important a driver is it of margin expansion? And what do you see as the primary drivers of margin expansion in the SER segment? That's all.

Christopher Eperjesy: I can start. We've lived in that mid-70% kind of gross margin range, certainly on the rental side, which we think is a good spot. We typically have said we want to be in the kind of low to mid-70s, and we're at the higher end of that range. I guess, the way I'd answer it is we think that's sustainable. There could be some upside there, but we feel really comfortable kind of where we're living right now in that mid-70s percent range.

Ryan McMonagle: Thanks, everyone, for your time today and your interest in Custom Truck. We appreciate the continued engagement and look forward to updating you next quarter. In the meantime, please don't hesitate to reach out with any questions. Thank you again, and have a great day.

Operator: This concludes today's call. Thank you for attending. You may now disconnect.